Consumer Watchdog Sues Debt-Relief Firm

WASHINGTON—The Consumer Financial Protection Bureau filed suit on Tuesday against a debt relief firm that has challenged the constitutionality of the consumer watchdog, alleging the company charged illegal fees and deceived customers.

The CFPB lawsuit against Morgan Drexen Inc. and its CEO, Walter Ledda, alleges the firm overcharged 22,000 of its customers millions of dollars in upfront fees tied to debt-relief services. The agency said Morgan Drexen advertised its customers would not be charged any up-front fees, but...